As per the news coming in, Uber has laid off 350 of its employees across the globe. Out of that 10% belongs to India. This was part of its 3rd cost-cutting drive this year.
This layoff would be affecting Uber’s businesses in India, which includes its food delivery vertical comes under UberEats.
Uber has around 2,700 people employed in India. The actual headcount of layoffs is yet not clear.
How Did This Happen?
The company has sent an email to its employees saying it would be cutting off 350 jobs across the globe. The ride-hailing giant has 75% employees based in Canada and the US.
The San Francisco-based company’s CEO Dara Khosrowshahi is supposed to visit India at the end of this month. But his visit may not be related to these lay-offs.
Why Would This Affect Indian Employees?
Around 2% of user’s revenue is generated by Uber India. But the company spends a large proportion of its expenditure in India.
That’s why it makes Indian employees a target for their cost-cutting drive. With the current layoffs, the total count for layoffs will reach 1,200 this year, which is around 1% of Uber’s total workforce.
In the second quarter of 2019, User has reported a loss of $5.2 billion, while it has reported a loss of $3.7 Billion in the first quarter of the same year.
The Nasdaq listed company refers to this loss to $298 million spent on driver appreciation award offered in relation to the company’s IPO. Around $3.9 billion spent in stock-based compensation expenses.
Another development seen in the company where Uber has restructured its corporate holdings and brought its Indian businesses including UberEats under the umbrella of Uber India Systems.
Henceforth the ride business will be invoiced out of India, as per the report. This restructured business has gone live on 1 October.
This Happened Earlier Too
This is the third time this year that this ride-hailing company decided to cut off some jobs. It has been on a mission to reduce losses due to disappointing performance by its IPO.
The first layoff affected the marketing and analytics division which happened in July this year. The next round did not affect Indian employees which occurred in September month.
It mostly affected some technology and product positions in the company.
According to sources, this drive might affect marketing, CRM team, and analytics positions in India. Uber confirmed on the global layoffs but didn’t want to open its cards till next media meet.
Companies this move also indicates that India’s online taxi services company is facing a slow growth as it reported a 4% increase with averaging 3.65 million rides last year. (reference Inc42)
Moreover, it’s business rival Ola has also gone public and presents a strong competition which definitely affects the margins earned by this San Francisco-based company.
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